Congress should repeal Renewable Fuel Standard
By James Thorpe
Since the beginning of time, the world's rivers and lakes have presented opportunities for commerce, travel and recreation. Here in Illinois where rivers have carved beautiful vistas through the prairie, they are enjoyed and greatly appreciated for fishing and boating among other pursuits.
My family's love of the state's waterways led us to create Spring Brook Marina in 1961 to provide access to the Illinois River and Lake Michigan. Over the years, we have expanded our services to boaters and now offer three fueling stations along our docks. We do not, however, sell fuel containing ethanol to any of our customers.
We have seen the effects of ethanol firsthand. When it was first introduced several years ago in E5, a fuel containing 5 percent ethanol and 95 percent gasoline, we discovered that the corn-based alcohol destroyed rubber fuel and vent hoses and caused fuel leaks into bilges.
Fortunately, the boaters who frequented our docks were observant and identified the problem before major fires or explosions could occur. We sought and found ethanol-free fuel for our customers.
But since that time, the federal government has stepped up its efforts to reduce demand for foreign oil by creating an artificial market for ethanol. In 2005, Congress passed the Renewable Fuel Standard (RFS), which led to the federal ethanol mandate for cars and trucks.
Today, nearly all of the gasoline sold in America is E10, a fuel consisting of 10 percent ethanol and 90 percent gasoline.
A few months ago, the Environmental Protection Agency (EPA) upped the ante by approving a request from the Growth Energy ethanol-producer coalition allowing the sale of E15, which contains up to 15 percent ethanol.
The ethanol producers were pleased with EPA's decision because it potentially increases their share of the U.S. transportation fuels market. But by appeasing them, the EPA is harming nearly everyone else.
Consider the economic distortions caused by the ethanol mandate and the RFS. By insisting that ever-larger quantities of the corn-based alcohol are added to fuels every year, the RFS has raised feed prices for beef and poultry farmers and pushed up global food prices. It also has been blamed for the civil unrest in Egypt due to escalating bread prices.
The RFS has created major problems for U.S. refineries which are supposed to blend up to 10 percent ethanol into the nation's gasoline supplies.
With U.S. gasoline demand declining, refiners are struggling to comply with the ethanol mandate without exceeding the 10 percent ceiling.
So rather than purchase ethanol, they are buying ethanol credits to prove they are making every effort to comply with the RFS. U.S. refiners have spent millions of dollars on credits, which has increased their costs.
U.S. corn farmers made a handsome profit from the ethanol mandate for the first few years of the RFS as demand for corn skyrocketed and prices soared. In 2012, an estimated 35-40 percent of the U.S. corn crop was used to produce ethanol. Corn farmers apparently expected a similar return on their investment this year, because the Department of Agriculture reports they planted the largest U.S. corn crop in about 80 years. But with less ethanol needed and better than expected yields, the price of corn has plummeted from a record of about $8 a bushel in mid-2012 to $4.40 a bushel at the end of September.
Motorists, too, are getting less than they bargained for. Ethanol contains fewer BTUs than gasoline, meaning that it reduces gas mileage and motorists have to fill up more often.
Furthermore, older cars can experience mechanical problems with E10.
In tests of fuels containing more than 10 percent ethanol — such as E15 — engineers discovered severe engine damage to valves and valve seats and swelling in some components. Because several automakers have warned that warranties will not cover problems caused by misfueling and E15 damage, the cost of repairs falls on the motorists.
Congress probably meant well when it enacted the RFS, but its good intentions have been to the detriment of motorists and boaters. By creating and mandating new recipes for motor fuels, our elected officials meddled in the complex interactions of fuels and engines, which should be the purview of engineers and chemists.
Now Congress should reverse course and undo the damage. It should repeal the RFS.
James Thorpe is president of Spring Brook Marina Inc., on the Illinois River in Seneca.